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Investing.com - UBS initiated coverage on Watches of Switzerland Group (LON:WOSG) with a Neutral rating and a price target of GBP4.00, according to a research note released Tuesday.
The luxury watch and jewelry retailer operates in both the UK and US markets, with sales split approximately 52% in the UK and 48% in the US, positioning it as what UBS describes as the only indirect play on privately-owned luxury watch brands like Rolex in the public market.
UBS cited historically higher category cyclicality, limited room for earnings surprises, and lack of re-rating potential as key factors behind its neutral stance in the current market environment.
The firm indicated it remains on the sidelines until gaining clarity on the long-term competitive landscape and profitability trajectory for the luxury watch retailer.
UBS noted its estimates for Watches of Switzerland align broadly with consensus, concluding the stock currently presents a balanced risk/reward profile.
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